• Video: Central Hawke's Bay rates increase could be between 20 and 30 per cent, says Mayor

Video: Central Hawke's Bay rates increase could be between 20 and 30 per cent, says Mayor

Central Hawke’s Bay ratepayers could be hit with a 20 to 30 per cent rates increase next year, says the region’s Mayor Alex Walker.

High debt could see the Council even reduce service levels in an attempt to get through this difficult period.

Walker says that the cost of the Cyclone Gabrielle recovery as well as other debt has put enormous pressure on her council’s finances.

“We are sitting at about $42 million of external debt currently. That's about two thirds of the way to where our debt cap would be. The trick at the moment is of course the interest rates are so much higher than they were even two years ago.”

“The interest costs on debt repayment are really significant. They're going to play a really significant role into what our three-year plan budgets going into the next year are going to look like.”

Walker told Hawke’s Bay App that the debt repayments could lift rates by six per cent “before we do anything else”.

Last year the Annual Plan 2023/24 saw rates increase by 10.88 per cent.

Walker is expecting this year’s increase to far exceed that.

“We are still not at the point where we even have got a secure number. It could be anywhere between 20 and 30% depending on how the different pieces come together.”

“It is big and the frustrating thing is there's more to do than we've ever had to do and it's going to cost us more to basically deliver less.”

“The inflationary environment that we're in for a council like ours is very, very challenging.”

Walker says that at a recent council meeting, councillors endorsed a direction to staff containing two options.

“The first one is trying to maintain the level of service of all of our key activities and any additional activities to be focused on roading recovery and our Three Waters recovery as well.”

“Then the second option is to be to keep focused on the Three Waters recovery and all the other templates that are in end on the roading recovery, but how do we downscale other activities in the short term with a plan to then bring them back again over the next three to five years.”

She says the Council is seriously looking at reducing levels of service on “everything else”.

“We've got a trade-off almost going on where we've got significant Three Waters investment to occur, but we've also got significant roading investment and it's like we can't play both cards at exactly the same time. We are having to get a bit clever about how we phase that.”

Walker admits that constant rates rises have been putting pressure on people’s household incomes for a long time.

“We've been raising rates significantly for the last few years. The rates in Central Hawke's Bay are more than 40% higher now than when I started seven years ago. We've been significantly raising rates.’

“So that raise is there, but we've got a central government regime, which is in the process of laying out tax cuts and how to get more money into the back pockets. It feels like we're almost operating in opposition to each other where tax cuts are going to deliver more money into household pockets, but then the inflation and cost coming to councils just means that it could just nullify that.”

“That feels like a really odd place to be in. I don't know how we resolve that, but it does feel like we're at odds.”

The Mayor says that it comes down to what the messaging and the leadership looks lik while navigating the current economic chapter.

“to have narrative from local leadership, which is quite different to that central leadership, is challenging for people to navigate and they shouldn't have to. I think we need to do a better job of getting that messaging consistent, but it is difficult.”